Answer:
<u>The total equity suffer no change.</u>
<em>Journal entry: </em>
Retained earnings 607,020 debit
Common Stock 362.4 credit
Additional Paid-in 606,657.4 credit
Explanation:
Stock dividends reduce a equity account --> retained earnings
And also, they increase equity accounts --> common quity and additional paid-in in excess of par.
<u>value of the stock issued:</u>
302,000 shares x 12% = 36,240 shares
36,240 shares x $16.75 = $ 607,020
<u>Common stock:</u> 36,240 x 0.01 = 362.4
<u>Additional paid in:</u> 607,020 - 362.4 = 606,657.6